Q: I turn 66 this year and my wife is 65. Neither one of us has started Social Security. We receive health insurance through my employer. Do we need to sign up for Medicare yet?
A: It depends. If you meet the requirements you’re OK to delay. It’s important to keep in mind that failure to enroll in Medicare on time is one of the most costly mistakes that working Medicare-age seniors make. You can wind up getting hit with late enrollment penalties that you’ll have to pay every year for the rest of your life. Those penalties could drain thousands in extra Medicare costs from you and your wife’s savings and income.
There are special rules that allow you to delay sign up for Medicare Part B when you receive healthcare benefits through work. You need to satisfy these three requirements:
- You are still working,
- Your employer continues to offer healthcare benefits, and
- Your employer has more than 20 employees.
Let’s say that you work for an employer with more than 20 employees. Then you and your wife may delay enrollment in Medicare, if you continue to work, and as long as you’re still covered by the group health plan. If your employment or coverage ends, however, then you and your wife have 8 months to enroll in Medicare. COBRA and retiree health plans don’t count as coverage based on current employment.
If your employer has less than 20 employers, beware. By law Medicare is the “first payer” of health insurance policies of small companies. This means you and your wife will need to enroll in Medicare in order for your healthcare claims to be covered. If you work for a company with less than 20 employees and try to file a claim, your insurer can deny it because Medicare is supposed to pay since you are Medicare-eligible. Because you and your wife are over 65, the government considers you Medicare-eligible, whether you have enrolled or not.
If your company has less than 20 employees, you can sign up for Medicare now during the General Enrollment Period between January 1 – March 31 each year. Your coverage will begin July 1, 2013.
To learn more details about enrollment periods, visit www.medicare.gov/publications to view the fact sheet “Understanding Medicare Enrollment Periods.” You can also call 1-800-MEDICARE (1-800-633-4227) and say “Agent.”
Sources: 2013 Medicare & You, Centers for Medicare and Medicaid Services, October, 2012.